Purchase Order Terms and Conditions

  1. PURCHASE ORDER AND MODIFICATIONS:  The agreement between Buyer and Supplier with respect to the purchase of materials, services, goods or articles described on the face of the Purchase Order (collectively, the “articles”) shall consist of the terms appearing on the face of the Purchase Order and the terms set forth herein (collectively, the “Purchase Terms”).  The Purchase Terms may not be added to, deleted or modified without Buyer’s written consent.  Any proposal for additional or different terms and any attempt by Supplier to add to or vary any of the Purchase Terms, is hereby objected to and rejected.  No such proposal shall operate as a rejection of the Purchase Order unless such proposal modifies the description, quantity, price or delivery schedule of the articles, but the Purchase Order shall be deemed accepted by Supplier without the additional or different terms.  Any prior course of dealing, trade usage, or oral agreement not reduced to a writing signed by Buyer will not be binding on Buyer to the extent it modifies, adds to or detracts from the Purchase Terms.  Supplier shall be bound by all of the Purchase Terms upon the happening of any of the following events: (a) Buyer’s receipt of the acknowledgement copy of the Purchase Order signed by Supplier, (b) Buyer’s receipt of notification from Supplier that Supplier has commenced performance under the Purchase Order or Buyer’s receipt of any other indication from Supplier that Supplier has accepted the Purchase Order, or (c) shipment or delivery to Buyer of any of the articles described on the Purchase Order.
  2. SHIPPING INSTRUCTIONS:  On date of shipment, Supplier shall send the original bill of lading, air bill or express receipt reflecting the Purchase Order number to the Buyer.  Supplier is permitted to deliver articles four (4) days ahead of schedule and zero (0) days late.  If Buyer requires articles to be delivered earlier, written authorization will be sent to Supplier.  Supplier shall mail invoices to Buyer’s Accounting Department when articles are shipped.  Supplier shall state shipping point on all invoices.  Each case or parcel and accompanying packing list of contents must show Buyer’s Purchase Order number, Buyers part number and quantities.  Supplier shall label all packages according to Buyer’s bar coding requirements.  If no packing list accompanies the shipment, Buyer’s count will be conclusive to Supplier.
  3. TERMS OF PAYMENT:  Unless otherwise expressly stated on the face of the Purchase Order, terms of payment shall be net – thirty (30) days.
  4. TRUCKING AND EXTRAS:  No charges will be allowed for transportation, packaging or packing returnable containers unless stated in the Purchase Order.  All shipments (a) must be packaged and conform with Buyer’s packaging specification referred to in the Purchase Order, if any, to permit efficient handling and provide protection in shipment and, if tendered to a common carrier, for delivery, and (b) must conform to the packaging requirements applicable to such carrier.  Damage to any articles resulting from improper packaging will be charged to Supplier.
  5. SPECIFICATIONS:  All articles ordered to U.S. Government’s, European Union’s or Buyer’s specifications will comply with such specifications in effect as of the date of the Purchase Order unless otherwise specified in writing by Buyer.  This also applies to what are known as “Industry Standard” statutory and regulatory standards or specifications.
  6. INSPECTION:  Supplier will afford Buyer a reasonable opportunity to inspect and test the articles prior to shipping and during their manufacture.  Buyer shall have the right to inspect and test the articles within a reasonable period (which in no event shall be considered a period of less than thirty days) after Buyer’s receipt of the articles, notwithstanding any prior inspection or testing by Buyer.  All defective or nonconforming articles may be rejected by Buyer without prejudice to any other rights Buyer may have by reason of such defects or nonconformity.  Supplier shall reimburse Buyer for any expenses incurred in unpacking, inspecting, repacking, storing and returning any rejected articles.  Payment for articles shall not constitute acceptance thereof and is without prejudice to any and all claims Buyer may have against Supplier.
  7. WARRANTY:  In addition to Supplier’s customary warranties and any other warranties contained in the Purchase Terms or implied in fact or by law, Supplier warrants that the articles furnished to Buyer will conform to all specifications, drawings, samples or other descriptions furnished or specified by Buyer and will be new, merchantable, of high quality and free from defects in design, material and workmanship.  Supplier warrants that all such articles will conform to any statements made on the containers, labels or advertisements for such articles, and be adequately contained, packaged, marked and labeled.  If Supplier knows or has reason to know the particular purpose for which Buyer intends to use the articles, Supplier warrants that such articles will be fit for such particular purpose.  Supplier warrants that the articles will confirm in all respects to samples.  In addition, Supplier warrants that it will comply with all applicable laws, rules and regulations of any governmental authority covering the production, sales or delivery of the articles.  Inspection, test, acceptance or use of the articles shall not affect Supplier’s obligation under this warranty.  All warranties shall survive inspection, test, acceptance, use and payment, and shall be for the benefit of Buyer to incorporate the articles into finished components, and/or supply such articles to customers.  The rights and remedies stated in this paragraph shall be in addition to, and not in lieu of, other rights and remedies that Buyer may have under other Purchase Terms or under law for breach of any of Supplier’s warranties.
  8. TERMINATION:  Buyer shall have the right to terminate the Purchase Order or any part thereof at any time “with or without cause” by written notice to Supplier.

    (a) Without Cause.  In the event Buyer exercises its right to terminate all or any part of a Purchase Order without cause, Supplier shall immediately stop work under the Purchase Order and immediately cause its suppliers and subcontractors to cease such work.  Supplier shall be entitled to reimbursement for any reasonable, non-recoverable costs incurred by Supplier in connection with its performance of the Purchase Order prior to its receipt of notice of termination, but in no event shall Supplier be entitled to reimbursement for (i) costs attributable to more than thirty (30) days’ finished inventories and more than sixty (60) days’ raw inventories, (ii) more than a percentage of the Purchase Order price reflecting the percentage of the work performed prior to Supplier’s receipt of the termination notice, (iii) costs incurred by Supplier for work performed after its receipt of the termination notice, or (iv) costs incurred by Supplier’s suppliers or subcontractors which Supplier or its suppliers or subcontractors reasonably could have avoided.  In case of termination by Buyer of all or any part of the Purchase Order without cause, any claim by Supplier for such termination must be submitted to Buyer in writing no later than thirty (30) days after Supplier’s receipt of such termination notice.  Supplier waives any claim for reimbursement of the costs provided for herein if Supplier fails to notify Buyer in writing of such claim within thirty (30) days after Supplier’s receipt of notice of termination.  This subparagraph shall not limit or affect Buyer’s right to terminate a Purchase Order for cause.

    (b) With Cause.  Buyer may terminate all or any part of the Purchase Order with cause by written notice to Supplier if (i) Supplier fails to make any delivery in accordance with the agreed delivery date or schedule or otherwise breaches or fails to observe or comply with any other instruction, term, condition, requirement, obligation, or warranty, separately or in any combination, under the Purchase Terms, (ii) Supplier fails to make timely progress in the production of the articles so as to create reasonable grounds for Buyer’s insecurity with respect to Supplier’s performance of its obligations under the Purchase Order, (iii) Supplier becomes insolvent, (iii) any proceeding in bankruptcy, reorganization or for the appointment of a receiver or trustee is filed by or against Supplier, or (iv) Supplier makes an assignment for the benefit of its creditors.  In the event of termination for cause, Buyer may produce, purchase or otherwise acquire articles elsewhere on such terms or in such manner as Buyer may deem appropriate and Supplier shall be liable to Buyer for any excess cost or other expenses incurred by Buyer.  Buyer shall have no obligation for any costs relating to any articles not delivered to Buyer before notice of termination is given to Supplier.  Buyer’s rights and remedies under this subparagraph shall be in addition to any other rights and remedies it may have under the Purchase Terms or by law by reason of any breach or default by Supplier.

  9. EXCUSABLE DELAYS: Neither party shall be liable to the other as a result of any delays arising out of any cause beyond its reasonable control and without its fault or negligence, including, but not limited to, acts of God or of the public enemy, acts of the U.S. Government in either its sovereign or contractual capacity, fires, floods, epidemics, quarantine restrictions, strikes, war, riots, and freight embargoes.  If the delay is caused by the delay of a subcontractor of Supplier, and if such delay arises out of causes beyond the reasonable control of both Supplier and the subcontractor and without the fault or negligence of either of them, Supplier shall not be liable to Buyer in damages unless the goods or services to be furnished by the subcontractor were obtainable from other sources in sufficient time to permit Supplier to meet the required delivery schedule. Supplier will notify Buyer in writing within ten (10) days after the beginning of any such cause.
  10. CHANGES:  Within the general scope of the Purchase Order, Buyer may require additional work, issue additional instructions or make changes by written direction to Supplier in any one or more of the following: (a) drawings, designs or specifications; (b) method of shipment or packaging; (c) delivery schedule; and (d) quantities.  If any such change results in an increase or decrease in the cost of performance of the Purchase Order, an equitable adjustment shall be made in the price.  Any claim by Supplier for adjustment under the Purchase Order pursuant to the preceding sentence must be made in writing within fifteen (15) days after Supplier’s receipt of notice of the change and must be approved by Buyer in writing, but nothing shall excuse Supplier from proceeding with the Purchase Order as changed.
  11. BUYERS INFORMATION:  Information, drawings, tooling drawings, data, design, inventions, computer software, ideas, suggestions and other technical information supplied by Buyer or developed by Supplier at Buyer’s request shall be Buyer’s property and shall be held in confidence by Supplier.  Such information shall not be reproduced, used, modified, or disclosed to others by Supplier without Buyer’s prior written consent.  Any information which Supplier may disclose to Buyer with respect to the design, manufacture, sale or use of the articles covered by the Purchase Order shall be deemed to have been disclosed as part of the consideration for the Purchase Order, and Supplier shall not assert any claim against Buyer for Buyer’s use thereof.
  12. REMEDIES:  The rights and remedies provided in this paragraph shall be cumulative and in addition to any further rights and remedies available to Buyer as provided by law or equity or under other Purchase Terms.  In addition to and not in limitation of any other remedies available to Buyer, Buyer may at its option: (a) return any nonconforming or late delivered articles to Supplier at Supplier’s expense; (b) charge Supplier for any amount in excess of the Purchase Order price required to obtain articles in substitution for articles not delivered pursuant to the Purchase Terms, including articles rejected due to nonconformity, late delivery or breach of warranty; (c) rework or repair articles to make them conform to the Purchase Order and charge Supplier for the expense thereof; (d) use the nonconforming articles for a purpose other than the purpose originally intended and charge Supplier for the amount by which the Purchase Order price exceeds the price of articles normally required for such alternative purposes; (e) charge Supplier for the full amount of any monetary loss suffered by Buyer as a result of any breach of the Purchase Terms; and (f) require Supplier to repair or replace defective articles at Supplier’s expense.
  13. PRODUCT LIABILITY AND INDEMNIFICATION:
    (a) Supplier assumes entire responsibility for the safety of all articles supplied to Buyer under the Purchase Order when such articles are used for their intended purposes and in accordance with reasonable warnings and instructions supplied by Supplier.  Supplier shall take all reasonable steps to directly warn users of any dangers associated with the articles.

    (b) Supplier accepts responsibility for, and shall defend, indemnify, and hold harmless Buyer and its affiliates, successors, directors and officers (individually, an “Indemnified Party” and collectively, the “Indemnified Parties”) from and against, any and all claims, demands, causes of action, lawsuits, judgments, decrees, liabilities, losses, damages, costs and expenses (collectively, “Claims”), including, without limitation, any attorneys’ fees, amounts paid in settlement of Claims, and the costs of any recall or other corrective action taken with respect to any of the articles supplied under the Purchaser Order, which arise directly or indirectly from or are in any way associated with (i) a defect in the design, manufacture, materials or assembly of the articles, whether or not such Claim arises within or beyond any warranty period, (ii) the use or operation of any article supplied under the Purchase Order, (iii) any personal injury or property damage in the nature of product liability, (iv) any failure of the articles to conform to the representations of Supplier as set forth in the Purchase Terms or otherwise made in writing by Supplier in connection with the sale or delivery of the articles, (v) any failure by Supplier to comply with any applicable law, (vi) any breach by Supplier of any of the Purchase Terms, and (vii) any action or inaction of Supplier, its employees, agents or subcontractors; provided, however, that Claims arising solely from the improper installation, use or maintenance of the articles by Buyer shall be excluded from the scope of Supplier’s obligations under this subparagraph.  This indemnity shall survive termination of the Purchase Order and shall be in addition to all other indemnities made by Supplier or other remedies available to the Indemnified Parties.

    (c) Supplier shall indemnify and hold Buyer harmless against any and all damages, costs and expenses incurred or suffered by Buyer as a result of (i) any recall by Buyer or any of its customers of any articles furnished under the Purchase Order or any end product sold by Buyer that employs or incorporates any such article as a part or component thereof, (ii) any repair or replacement by Buyer or any of its customer of any such articles or end products, and (ii) any refund by Buyer or any of its customers of the purchase price paid by Buyer’s customers or end users for any such articles or end products; provided, however, that any such recall, repair, replacement or refund is based upon a defect, whether of design, manufacture, materials or warnings, in the articles furnished by Supplier or the failure of such articles to conform to any standard to which such articles are required to conform by law or under the Purchase Terms, any applicable industry standard, or any specification or standard to which Buyer ordered the article (an “Applicable Standard”), which creates a reasonable possibility of injury to persons or property.  In the event that the articles supplied by Supplier are not the sole cause for any such action by Buyer, Buyer shall apportion its costs, damages and expenses in such manner as it shall determine in its sole judgment is reasonable and equitable.  Buyer shall not be required to consult with Supplier or seek Supplier’s concurrence for any report submitted by Buyer to any administrative or regulatory agency or body, or for the communication to any such agency or body of information that articles furnished by Supplier fail to conform to any Applicable Standard or constitute or create, either themselves or when incorporated in or employed with the end products of which they are a part or component, a situation requiring a report or notice to such agency or body or a recall or other corrective action.  Supplier hereby releases and discharges Buyer from any liability for any error or omission in reporting such information to any such agency or body.

    (d) Supplier shall pay all costs and expenses, including but not limited to attorneys’ fees, which may be incurred by any of the Indemnified Parties in connection with enforcing any of the foregoing indemnity provisions.

  14. RECORDS:  Supplier shall prepare, maintain and file with the appropriate authority such records and reports as pertain to the manufacture, sale, use and characteristics of the articles furnished to Buyer under the Purchase Order as may be required by any federal, state or local law or regulation concerning the manufacture, sale or use of articles or the end products of which the articles may be a part or component.  Supplier shall provide Buyer with copies of such records as Buyer may require and permit Buyer access to Supplier’s records to permit Buyer to ascertain Supplier’s compliance with this paragraph.
  15. PRICES:  Supplier represents, covenants, and warrants that the prices in the Purchase Order are not less favorable than those currently extended to any other customer for the same or similar articles in similar quantities, and that prices will comply with all applicable laws or governmental regulations in effect at the time the Purchase Order is accepted. In the event Supplier reduces its price for such articles before all articles covered by the Purchase Order are paid for by Buyer, Supplier shall notify Buyer of such price reductions and reduce its price for the articles covered by the Purchase Order accordingly for any articles for which Buyer has not yet paid.
  16. STATUTORY AND REGULATORY COMPLIANCE:  Supplier shall comply with, and the articles furnished under the Purchase Order shall be produced in compliance with and conform to, all applicable laws and governmental regulations, rules and requirements pertaining to the production, sale or delivery of the articles and the performance of the Purchase Order.  Supplier warrants that articles furnished under the Purchase Order shall comply with the related industry standards, such as IPC-A-610, J-STD-001, and IEC 60068-2-58, or any other standard referenced on a drawing or Purchase Order.  Examples of common statutory and regulatory requirements include:

    (a) RoHS Directive (2011/65/EU):  Restriction of the Use of Certain Hazardous Substances.  Articles furnished shall contain less than the concentration thresholds for the metals and compounds identified in RoHS Directive 2011/65/EU.  A RoHS Certificate of Compliance is expected from Supplier to be provided with every shipment and identified on the invoice.  Full Material Declaration Sheets that identify all ingredients and their constituent weights of the article may be requested by Buyer for confirmation of RoHS compliance.  Third party laboratory certification (i.e., SGS, CTI) may be requested as well.

    (b) REACH Regulation (EC) No 1907/2006:  Registration, Evaluation, Authorization, and Restriction of Chemicals developed by the European Parliament and of the Council of 18 December 2006.  Articles furnished shall contain less than the concentration threshold for the list of Substance of Very High Concern (SVHC).  The SVHC list is updated with new chemicals every six (6) months and must be continually monitored by Supplier.  Articles that contain SVHC, regardless of the amount, must be reported by Supplier to Buyer before accepting the Purchase Order.  Full Material Declaration Sheets that identify all ingredients and their constituent weights of the article may be requested by Buyer for confirmation of REACH compliance.  Third party laboratory certification (i.e., SGS, CTI) may be requested as well.

    (c) Safety and Insulation Systems:  Underwriters Laboratories (UL), Canadian Underwriters Laboratories (cUL), Canadian Standards Association (CSA), and TUV Rheinland, are examples of safety related standards. These are applicable per the drawing, purchase order, or approved samples.

    (d) Export Controlled Articles – ITAR or EAR:  Some articles procured by Buyer may be classified as export controlled by the International Traffic in Arms Regulations 22 C.F.R. Parts 120-130 (ITAR) and the Export Administration Regulations 15 C.F.R. §§730-774 (EAR).  Buyer will notify Supplier of ITAR or EAR obligation, and will require Supplier to certify export control compliance through Buyers FRM-USEC-02, prior to providing ‘Technical Data’ as defined by the ITAR §120.10.  In general, Technical Data is information that is required for the design, development, production, manufacturing, assembly, operation, repair, testing, maintenance or modification of Defense Articles-(ITAR §120.6).  This includes drawings, blueprints, photos, or other documentation that provides details about the requested articles.  Supplier understands that Buyer requesting ITAR compliance means the articles will ultimately be used in Defense Articles.  Supplier shall not export/release Technical Data to any non-U.S. Persons, within the U.S. or abroad.  Export is defined by the ITAR §120.17, in general as transferring or disclosing verbally or visually, any Technical Data to non-U.S. Persons.  A U.S. Person defined by the ITAR §120.15 is a citizen or lawful permanent resident (i.e., Green card holder).  Supplier will take responsibility of reviewing and understanding the ITAR and EAR.

Technical Data will be identified with a statement such as:
Export Controlled Technical Data – ITAR

The Purchase Order for export controlled articles will have the following statement:
WARNING - This document contains technical data, export of which is restricted by the International Traffic in Arms Regulations (ITAR) 22 C.F.R. Parts 120-130  and the Export Administration Regulations (EAR) 15 C.F.R. §§730-774.  Without prior U.S. Government licensing, the disclosure of technical data/drawings to foreign persons within the U.S. or abroad is prohibited.  Violations of export laws and regulations are subject to civil and criminal penalties.